Energy boss says price rises may be “inescapable” if the war in the Middle East drags on

Housing Minister Steve Reed said there is a contingency plan ready, but urged people to “buy their fuel just like they always would”.

There are increasing concerns about how the Iran conflict could affect the cost of living, with the prime minister due to hold a Cobra meeting this week to discuss plans to help households.

Iran has kept up its stranglehold on shipping in the Strait of Hormuz, causing oil prices to spike.

Yesterday, the chief executive of Centrica, which owns British Gas, said global oil supplies are down 20% because of the conflict.

Chris O'Shea told BBC's ‘Sunday With Laura Kuenssberg’ programme: “Cornwall Insight, I think, have predicted that there's going to be an increase in prices.

“If it stays as it is then I think that's inescapable.

“The world uses about 100 million barrels of oil a day. We've lost about 20% of that through the Strait of Hormuz.”

Mr Reed urged people not to start panic-buying fuel.

He told Sky News' ‘Sunday Morning with Trevor Phillips’: “There's no need to ration fuel. People should go around and buy their fuel just like they always would.

“If the situation were to change, then the government would look at what was required in that circumstance.

“We did intervene when it came to heating oil, because we saw the prices escalating and people were seeing their bills doubling and tripling overnight. We can't have that, so we stepped in to support people.”

The Conservatives have said the government should scrap “green taxes” to cut costs.

Shadow housing secretary Sir James Cleverly also said North Sea oil and gas fields should be opened.

He told Sky: “We've said a lot of these green taxes were put in place when the world was in a very, very different state and are now inappropriate and counterproductive, so we're saying we should reduce those to make sure that we are not imposing additional, unnecessary costs.”

Speaking about North Sea oil and gas fields, he said: “The government should be doing those things today which will alleviate the problem in the near future.”

Lord Richard Walker, the cost-of-living tsar, said he has “asked the government to consider a temporary profit cap, if required, to stop producers and retailers exploiting the crisis to make windfall profits at the expense of consumers”.

Meanwhile Dublin Tanaiste and Finance Minister Simon Harris said his government will be taking measures tomorrow to “reduce prices at the petrol pump” and “support those most at risk of fuel poverty”.

In a statement on Saturday, Mr Harris said he is “conscious of the fact that people are really feeling financial pressure, and indeed financial anxiety” due to the rising prices.

“At this point, there is no clarity regarding the depth and duration of the conflict – this means there is considerable uncertainty regarding the economic fallout from the shock to oil supplies,” he said

“If the conflict continues for a prolonged period, the impact on the global economy will be real – Ireland could not be immune from such an outcome.

“It is important to stress that we, in Ireland, are approaching this global economic challenge from a position of relative strength – we are running a significant budgetary surplus which gives us the fiscal capacity to respond.”